Audit report 2009 by H.E.R.A.

Financial Statements and Independent Auditors' Report H.E.R.A. â&#x20AC;&#x201C; Health Education and Research Association, Skopje 31 December 2009

H.E.R.A â&#x20AC;&#x201C; Health Education and Research Association, Skopje

Contents

Page Independent Auditorsâ&#x20AC;&#x2122; Report

Balance Sheet

Statement of Income, Expenses and Changes in Fund Balances

Statement of Functional Expenses

Notes to the financial statements

Independent Auditors’ Report Grant Thornton DOO M.H.Jasmin 52 v-1/7 1000 Skopje Macedonia T +389 (2) 3214 700 F +389 (2) 3214 710 www.grant-thornton.com.mk

To the Executive Committee of H.E.R.A – Health Education and Research Association, Skopje We have audited the accompanying financial statements of Health Education and Research Association Skopje (further referred to as “H.E.R.A” or the “Association”) which comprise of the Balance sheet as at 31 December 2009 and 2008, and the Statement of income, expenses and changes in fund balances and Statement of functional expenses for the year then ended, and a summary of significant accounting policies and other explanatory notes, included on pages 3 to 15. The Association’s financial statements as of and for the year ended 31 December 2008 are not audited and they are presented in these financial statements only for comparative purposes. Therefore we do not express opinion on the Balance sheet, Statement of income, expenses and changes in fund balances and Statement of functional expenses as of and for the year ended 31 December 2008. In addition, any adjustments, that might have been necessary if such an audit has been performed, could have material effect over the Association’s results from operations and on changes in fund balances for the year ended 31 December 2009. Accordingly, we do not express an opinion on the Statement of income, expenses and changes in fund balances and Statement of functional expenses as of and for the year ended 31 December 2009. Management’s responsibility for the financial statements

The Association Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting policies and procedures disclosed in Note 2. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Chartered Accountants Macedonian member firm of Grant Thornton International Ltd

H.E.R.A â&#x20AC;&#x201C; Health Education and Research Association, Skopje

Financial statements 31 December 2009

Balance Sheet

Current Year In Macedonian Denars (MKD) Note

Unrestricted

Restricted

Total

In US Dollars (USD) Unrestricted

Restricted

Total

Prior Year Total In Macedonian In US Dollars Denars (MKD) (USD)

ASSETS Current assets: Cash: Current accounts and in hand

Total current assets Non-current assets: Fixed assets Investments Loan receivable due after 1 year Total non-current assets

505,049.00

5,715,431.00

6,220,480.00

11,837.52

133,960.33

145,797.85

4,980,910.00

124,522.75

505,049.00

5,715,431.00

6,220,480.00

11,837.52

133,960.33

145,797.85

4,980,910.00

124,522.75

515,827.00 -

12,090.14 -

788,130.00 -

19,703.25 -

515,827.00

12,090.14

788,130.00

19,703.25 -

TOTAL ASSETS

1,020,876.00

5,715,431.00

6,736,307.00

23,927.66

133,960.33

157,887.99

5,769,040.00

144,226.00

H.E.R.A â&#x20AC;&#x201C; Health Education and Research Association, Skopje

Financial statements 31 December 2009

Statement of Income, Expenses and Changes in Fund Balances

Current Year In Macedonian Denars (MKD) Note Grant Income IPPF Cash Grant Other Income Governments Cooperating Agencies Foundation / Trusts / NGO's UN Organisations Clinical Services Other services sales Other Income Local Donations TOTAL INCOME

Unrestricted

Restricted

Total

US Dollar Unrestricted

Restricted

Total

Prior Year Total In Macedonian US Dollar Denars (MKD)

2,246,198 270,784 -

3,032,132 562,286 8,512,817 978,558 55,764 -

5,278,330 562,286 8,512,817 978,558 326,548 -

49,458.80 6,061.41 -

66,764.20 13,212.27 200,574.78 21,909.36 1,307.02 -

116,223.00 13,212.27 200,574.78 21,909.36 7,368.43 -

2,492,606.00 50,000.00 7,387,322.50 843,232.00

63,167.92 1,250.00 184,683.06 21,080.80

286,480.50

7,162.01

2,516,982

13,141,557

15,658,539

55,520.21

303,767.63

359,287.84

11,059,641.00

277,343.80

H.E.R.A â&#x20AC;&#x201C; Health Education and Research Association, Skopje

Financial statements 31 December 2009

Statement of income, expenses and changes in fund balances (continued)

Current Year In Macedonian Denars (MKD) Unrestricted Expenses by Strategic Framework Goal 1 Abortion Goal 2 Access Goal 3 Advocacy Goal 4 Aids Goal 5 Youth Total Goals Supporting Strategies Management and Admin (Indirect costs)

2,011,933

TOTAL EXPENSES Net incoming/outgoing resources before transfers Transfers between funds Fund balances at beginning of year Cumulative translation adjustments FUND BALANCES AT END OF YEAR

Restricted 433,094 7,616,199 1,068,113 872,976 1,656,098 11,646,480 748,250

US Dollar

Total

Unrestricted

Restricted

Total

Prior Year Total In Macedonian US Dollar Denars (MKD)

433,094 7,616,199 1,068,113 872,976 1,656,098 11,646,480 748,250

9,816.27 172,624.64 24,209.27 19,786.40 37,536.22 263,972.80 16,959.43

8,117,041 -

202,926.03 -

2,011,933

45,601.38

2,011,933

12,394,730

14,406,663

45,601.38

280,932.23

326,533.61

8,117,041

202,926.03

2,516,982 -

13,141,557 4,065,018

15,658,539 4,065,018

55,520.21 -

303,767.63 101,625.45

359,287.84 101,625.45

11,059,641 1,122,418

276,491.03 28,060.45

1,918.69

(11,679.09)

(9,760.40)

505,049

4,811,845

5,316,894

11,837.52

112,781.76

124,619.28

4,065,018

101,625.45

H.E.R.A. â&#x20AC;&#x201C; Health Education and Research Association, Skopje

Financial statements 31 December 2009

Statement of Functional Expenses

PROGRAMMES

Goal 1 Personnel & Benefits

TOTAL 2009 (Current Year)

Goal 2

Goal 3

Goal 4

Supporting Strategies

Goal 5

Sub-total Direct Expenses

TOTAL 2008 (Prior Year) Total in Macedonian Denars

Indirect Expenses

Total in US Dollar

Total in Macedonian Denars

Total in US Dollar 136,578.03

1,984,298

55,130

289,156

72,000

2,400,584

741,111

3,141,695

71,207.96

Professional Fees

135,122

2,849,178

360,061

258,367

482,118

94,591

4,179,437

94,728.85

5,463,121

Travel & Per Diem

204,080

358,757

277,258

405,293

323,957

380,033

1,949,378

44,183.54

210,000

5,250.00

24,900

379,868

37,600

73,564

116,042

79,402

711,376

16,123.66

500,831

12,520.78

65,424

396,121

265,207

54,909

239,264

19,000

1,039,925

195,682

1,235,607

28,005.60

117,828

2,945.70

99,057

944,025

1,043,082

23,641.93

98,333

2,458.33

Transportation Office supplies & Consumables Medical /AV supplies & Consumables Communications Occupancy & utilities Depreciation Other Expenses Total at Dec 31 2009 in Macedonian Denars Total at Dec 31 2009 in US Dollar

162,560

2,950

20,370

13,000

198,880

124,772

323,652

7,335.72

0.00

1,111

968,060

2,360

21,648

66,688

42,976

1,102,843

24,996.44

477,174

11,929.35

2,457

418,300

67,547

59,195

118,503

47,248

713,250

6,343

719,593

16,309.90

1,249,754

31,243.85

433,094

7,616,199

1,068,113

872,976

1,656,098

748,250

12,394,730

2,011,933

14,406,663

8,117,041 326,533.61

202,926.03

H.E.R.A. – Health Education and Research Association, Skopje

Notes to the financial statements (continued) As of and for the year ended 31 December 2009 and 2008 (All amounts expressed in Macedonian Denars and US Dollars unless otherwise stated)

Notes to the financial statements

General

H.E.R.A – Health Education and Research Association is an independent, non-governmental organization, an association of citizens established during 2000 according to the Law of Associations of Citizens and Foundations (Official Gazette of RM no. 31/98). The Association is registered in the register of the Association of Citizens and Foundations with Decision no. 01/3G.963/2000 from 20.01.2000 in the Basic Court Skopje 1 in Skopje. The Association operates in accordance with the Law of Associations of Citizens and Foundations and a Statute. The main bodies of H.E.R.A. are the Assembly, Executive Committee and Executive office. The Association is located in Skopje, Str. Dame Gruev no.1-3/15. The Association’s mission is inclined towards achieving enjoyment of basic human rights of women, men and the young who must be correctly informed and have appropriate access to high quality confidential services in order to make their informed choice regarding issues such as their sexuality, as well as the prevention, care and treatment of sexually transmittable infections and HIV, including achievement of full protection of the rights of people who live with HIV/AIDS and their close families, contraception, access to safe and legal abortion and exercise of sexual and reproductive rights. The Association’s five priority focus areas are: Abortion – in order to guarantee the right of choice to any woman, provide access to safe and legal abortion and increase the rate of use of contraception; Adolescents – in order to achieve greater consciousness among the youth with regard to their sexual and reproductive health and rights and provide access to comprehensive information, education and services for the enhancements of sexual and reproductive health among the youth; HIV/AIDS – in order to achieve lower rates of HIV/AIDS prevalence in the country, which is in accordance with the 2007 – 2011 National HIV/AIDS Strategy and provide full protection of the rights of the persons infected and affected by HIV. Access – in order to serve each person with valid information and knowledge in connection with his/her sexual and reproductive health and provide access to a variety of services in order for each person to be able to exercise his/her health, social, sexual and reproductive rights; Advocacy – in order to achieve full compliance with the different needs of each individual and to protect his/her rights and in this sense achieve highest possible standards, harmonize accordingly: national policies, regulations, laws and programs in connection with sexual and reproductive health and rights.

H.E.R.A. – Health Education and Research Association, Skopje

Notes to the financial statements (continued) As of and for the year ended 31 December 2009 and 2008 (All amounts expressed in Macedonian Denars and US Dollars unless otherwise stated)

General (continued)

The following table summarizes the Projects implemented during 2009: Project name Abortion is women’s right to choose and reproductive right for every woman Value Clarification training First Y-PEER Training of Peer educators in Sex work and HIV/AIDS Increased access to social and health services for Roma families Roma Health Facilitators: Macedonia Roma Youth Resource Centre Suto OrizariSkopje Youth SRH friendly services, with focus to Roma and groups vulnerable to HIV/STI Promoting Draft SRH strategy at Local Government level Sexuality education and SRH in the schoolsWhere are we now! Young people stand for fulfilling the ICPD commitments Care, support and capacity building of People Living with HIV/AIDS Prevention: Testing and counselling Peer education for prevention of tuberculosis among young people aged 15-24 Promoting boys SRH and safe and legal abortion among young girls age 15 to 24 Raising young Roma people awareness on human rights, with focus on SRR in school Youth HIV/SRH peer education Development of medium-term Strategic Plan of NGO H.E.R.A. 2

Strategic goal

Abortion

Supported by International Planned Parenthood Federation International Planned Parenthood Federation

Access

United Nations Population Fund

Access Access

Municipality of City Skopje Norwegian Church Aid

Access

Norwegian Church Aid International Planned Parenthood Federation Institute for Public Health Macedonia International Planned Parenthood Federation International Planned Parenthood Federation and United Nations Population Fund International Planned Parenthood Federation Global Fund to fight HIV/AIDS, Tuberculoses and Malaria Global Fund to fight HIV/AIDS, Tuberculoses and Malaria International Planned Parenthood Federation United Nations Development Programme Institute for Public Health Macedonia International Planned Parenthood Federation

Abortion

Access Advocacy Advocacy

Advocacy HIV/AIDS HIV/AIDS YOUTH YOUTH YOUTH YOUTH Capacity Building

Accounting policies

Following are the principal accounting policies adopted in the preparation of these financial statements: 2.1

Basis of preparation

The financial statements of H.E.R.A are prepared under the historical cost convention modified in accordance with the International Planned Parenthood Federation (IPPF)’s accounting polices issued in June 1992, and revised in June 1995, and the accepted accounting principles, practice and accounting standards for a presentation of assets, liabilities, funds, revenues and expenses, and the operating results on accurate, fair, confidential, complete and punctual basis. The financial statements have been prepared as of and for the years ended 31 December 2009 and 2008. Current and comparative data stated in these financial statements are expressed in Denars as functional currency, and translated into US Dollars as presentation currency.

H.E.R.A. â&#x20AC;&#x201C; Health Education and Research Association, Skopje

Notes to the financial statements (continued) As of and for the year ended 31 December 2009 and 2008 (All amounts expressed in Macedonian Denars and US Dollars unless otherwise stated)

2.2

Foreign currencies

Transactions and balances

Transactions denominated in foreign currencies have been translated into Macedonian Denars using exchange rate at the date when amount is received or paid; Translations into US Dollars

Income and expenditures in local currency are translated into US Dollars using the average exchange rate obtained from the National Bank of the Republic of Macedonia middle exchange rate on the the exchange of US Dollars during the period, as follows 1 US Dollar = 44.12 Denars; Assets and liabilities are translated into US Dollars at the exchange rate prevailing as at the year end, using the National Bank of the Republic of Macedonia middle exchange rate on the last day of the reporting period as follows: 1 US Dollar = 42.6651 Denars; Exchange differences arising from translation are taken directly to reserves / fund balances (i.e. not recognized in the statement of income, expenses and changes in fund balances). 2.3

Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks and other shortterm highly liquid investments with original maturities of three months or less. 2.4

Fixed assets

Items of equipment are stated at cost less accumulated depreciation. Cost includes expenses directly attributable to purchase of assets. The operating Fund of the Association increases for the amount of the value of equipment purchased. Equipment is recognized as capital expenditure in the period of acquisition, i.e. when the funds (in cash or in assets) are received from the donors. Depreciation of equipment items is calculated using the straight - line method as to allocate the cost / deemed cost to their residual values during the estimated useful life, as follows: Vehicles, computers, equipment

2009 10-25%

2008 10-25%

Depreciation is charged against the funds. 2.5

Fund

Funds are initially created by foundersâ&#x20AC;&#x2122; contributions made in monetary and/or in kind assets carried at their fair values. Subsequently, funds are increased/decreased through additional foundersâ&#x20AC;&#x2122; contributions, than results (surplus/shortages) from operations during the periods, as well as changes in the net carrying amounts of the equipment (capital expenditures) as explained in Note 2.4.

H.E.R.A. – Health Education and Research Association, Skopje

Notes to the financial statements (continued) As of and for the year ended 31 December 2009 and 2008 (All amounts expressed in Macedonian Denars and US Dollars unless otherwise stated)

2.6

Revenue and expense recognition

The recognition criteria of the revenues and expenses of the Association are based on the accounting principle for modified presentation of the operating transactions. On this basis revenues and expenses are recognized as follows:

Revenues are recognized in the accounting period in which they occurred, if they are measurable and available. Revenues are measurable if determinable in term of value. Revenues are available when they are generated in the accounting period when occurred or within 30 days after the expiry of the accounting period, provided that the revenues refer to the accounting period and are used to cover the liabilities for the respective accounting period.

Expenses are recognized in the accounting period in which they occurred or within 30 days after the expiry of the accounting period, provided that the related liability has occurred in that accounting period.

Cash and cash equivalents 2009 Macedonian Denars

Bank accounts: - in domestic currency - in foreign currency Cash on hand

5,581,701.00 638,779.00 6,220,480.00

US Dollar 130,825.92 14,971.93 145,797.85

2008 Macedonian Denars 4,342,131.00 638,779.00 4,980,910.00

US Dollar 108,553.28 15,969.47 124,522.75

Fixed assets Office Furniture

Office Computers and Equipment Accessories

Total in Macedonian Denars

Cost of valuation At 01 January 2009 Additions during the year Disposals At 31 December 2009

248,782.00 248,782.00

413,115.00 413,115.00

1,110,406.00 1,110,406.00

1,772,303.00 1,772,303.00

Accumulated depreciation At 01 January 2009 Charge for the year Release of disposal At 31 December 2009

139,318.00 33,645.00 172,963.00

224,990.00 104,409.00 329,399.00

619,865.00 134,249.00 754,114.00

984,173.00 272,303.00 1,256,476.00

Net carrying amount At 01 January 2009 At 31 December 2009

109,464.00 75,819.00

188,125.00 83,716.00

490,541.00 356,292.00

788,130.00 515,827.00

H.E.R.A. â&#x20AC;&#x201C; Health Education and Research Association, Skopje

Notes to the financial statements (continued) As of and for the year ended 31 December 2009 and 2008 (All amounts expressed in Macedonian Denars and US Dollars unless otherwise stated) Fixed assets (continued)

Office Furniture

Office Computers and Equipment Accessories

Total in US Dollars

Cost of valuation At 01 January 2009 Exchange adjustments Additions during the year Disposals At 31 December 2009

6,219.55 (388.51) 5,831.04

10,327.88 (645.14) 9,682.74

27,760.15 (1,734.05) 26,026.10

44,307.58 (2,767.70) 41,539.88

Accumulated depreciation At 01 January 2009 Exchange adjustments Charge for the year Release of disposal At 31 December 2009

3,482.95 (191.56) 762.58 4,053.97

5,624.75 (270.66) 2,366.48 7,720.57

15,496.63 (864.24) 3,042.81 17,675.20

24,604.33 (1,326.46) 6,171.87 29,449.74

Net carrying amount At 01 January 2009 At 31 December 2009

2,736.60 1,777.07

4,703.13 1,962.17

12,263.52 8,350.90

19,703.25 12,090.14

H.E.R.A. â&#x20AC;&#x201C; Health Education and Research Association, Skopje

Notes to the financial statements (continued) As of and for the year ended 31 December 2009 and 2008 (All amounts expressed in Macedonian Denars and US Dollars unless otherwise stated)

Statement of changes in donor restricted fund balances, year ended 31 December 2009

In Macedonian Denars

Donors Restricted funds and reserves Fund balance at the beginning of the year Grant remittances

International Planned Parenthood Federation (IPPF)

Global Fund to fight Tuberculoses (GF TBC)

Global Fund to fight HIV/AIDS

City Skopje

Norwegian Church Aid

Institute for Public Health Macedonia

United Nations Development Programme (UNDP)

United Nations Population Fund (UNFPA)

IPH Kumanovo

SOROS

Agency for youth and sports

6,670

180,291

136,078

1,889,488

1,178,060

173,521

88,968

28,621

Dues income

Total

383,321

4,065,018

3,032,132

792,494

5,124,478

276,557

2,625,345

274,624

44,779

933,778

27,000

10,370

13,141,557

Inventories donated

Fixed assets donated

Subtotal

3,212,423

928,572

7,013,966

276,557

3,803,405

274,624

218,300

1,022,746

27,000

38,991

6,670

383,321

17,206,575

Expenditures during the year

2,764,131

863,561

4,908,423

276,092

2,139,997

276,431

214,884

905,550

38,991

6,670

12,394,730

2,764,131

863,561

4,908,423

276,092

2,139,997

276,431

214,884

905,550

38,991

6,670

12,394,730

448,292

65,011

2,105,543

465

1,663,408

(1,807)

3,416

117,196

27,000

383,321

4,811,845

2,246,198

270,784

2,516,982

Total expenditures Fund balance at the end of the year Unrestricted funds and reserves Fund balance at the beginning of the year Grant remittances Inventories donated

Fixed assets donated

2,246,198

270,784

2,516,982

Subtotal Expenditures during the year

Total expenditures Fund balance at the end of the year

2,011,933

234,265

270,784

505,049

H.E.R.A. â&#x20AC;&#x201C; Health Education and Research Association, Skopje

Notes to the financial statements (continued) As of and for the year ended 31 December 2009 and 2008 (All amounts expressed in Macedonian Denars and US Dollars unless otherwise stated)

Statement of changes in donor restricted fund balances, year ended 31 December 2009 (continued) In US Dollars

Donors Restricted funds and reserves Fund balance at the beginning of the year Grant remittances

Internationa l Planned Parenthood Federation (IPPF)

Global Fund to fight Tuberculoses (GF TBC)

Global Fund to fight HIV/AIDS

4,507.28

3,401.95

47,237.20

66,764.20

17,939.29

United Nations Development Programme (UNDP)

Norwegian Church Aid

Institute for Public Health Macedonia

29,451.49

4,338.02

2,224.20

715.53

166.75

9,583.03

121,180.96

6,484.61

61,454.63

6,183.21

998

20,911.36

544.45

235.04

1,071.98

City Skopje

United Nations Population Fund (UNFPA)

IPH Kumanovo

SOROS

Agency for youth and sports

Translation differrences

Dues income

Total

Inventories donated

101,625.46 -

297,859.42

Subtotal

71,271.48

21,341.24

168,418.16

6,484.61

90,906.12

6,183.21

5,336.02

23,135.56

544.45

950.57

166.75

10,655.01

389,994.90

Expenditures during the year

62,650.29

19,573.01

111,251.65

6,257.75

48,504.01

6,265.44

4,870.44

20,524.71

883,75

151.18

280,932.23

Total expenditures

62,650.29

19,573.01

111,251.65

6,275.75

48,504.01

6,265.44

4,870.44

20,524.71

883,75

151.18

280,932.23

11,679.09

8,621.19

1,768.23

57,166.51

226.86

42,402.11

(82.23)

465.58

2,610.85

544.45

66.82

15.57

10,655.01

11,679.09

112,781.86

49,458.80

6,061.41

Fixed assets donated

Translation differences Fund balance at the end of the year Unrestricted funds and reserves Fund balance at the beginning of the year Grant remittances

55,520.21

Inventories donated

Fixed assets donated

Subtotal

49,458.80

6,061.41

55,520.21

Expenditures during the year

45,601.38

Total expenditures

45,601.38

1,918.69

3,857.42

6,061.41

1,918.69

11,837.52

Translation differences Fund balance at the end of the year

H.E.R.A. â&#x20AC;&#x201C; Health Education and Research Association, Skopje

Notes to the financial statements (continued) As of and for the year ended 31 December 2009 and 2008 (All amounts expressed in Macedonian Denars and US Dollars unless otherwise stated)

Accounts payable

At December 31, 2009 payables amounting 775.27 US Dollars (2008: 1,134.57 US Dollars), relate to contracted liabilities which are not settled as of this date. Following table provides details of the Associationâ&#x20AC;&#x2122;s payables as of Balance Sheet dates: 2009 Macedonian Denars Liabilities for Personal and benefits expenses Trade payables

US Dollar

2008 Macedonian Denars

US Dollar

33,077.00 -

775.27 -

45,383.00

1,134.57

33,077.00

775.27

45,383.00

1,134.57

Contingencies and commitments

Litigations

As at 31 December 2009, there are no legal proceedings raised against the Association, therefore no provision has been made as of the balance sheet date. In addition, various legal actions and claims may be asserted in the future against the Association from litigations and claims incident to the ordinary course of business. Related risks have been analyzed as to likelihood of occurrence. Although the outcome of these matters cannot always be ascertained with precision, the Associationâ&#x20AC;&#x2122;s Management believes that no material liabilities are likely to result. Commitments

As at 31 December 2009, the Association has commitments in amount of 213,326 Macedonian Denars equivalent of 5,000 US Dollars for intellectual services for 2009. 8

Events after reporting date

Subsequent to the reporting date and prior to the issuance of these financial statements the Association entered into agreements with Donors for financing its project activities in 2010 in the amount of 6,511,125 Denars (US Dollars 106,437.54).